WHEN Peter Vallone talks about his credentials to be mayor, he highlights one key fact: Under his 12 years at the helm of the City Council, New York City taxpayers were hit with only one significant tax increase.

Vallone actually brags about having muscled this tax increase past the resistance of a recalcitrant Mayor Dinkins and an indifferent Albany. And who could blame him?

You might say that Vallone’s “Safe Cities, Safe Streets” initiative, which levied a 9.5 percent surcharge on city taxpayers for seven years, was the most successful and valuable tax increase in modern history. A city overwhelmed by the worst crime wave of the century was able to hire 10,000 new cops, not to mention assistant district attorneys and corrections officers to deal with the arrests those cops were going to make.

Otherwise, Vallone points out that the city’s current economic health – with budget surpluses used to reduce the public debt burden – occurred over the past seven years “without raising a single solitary tax.”

Indeed, Vallone allowed the Safe Cities, Safe Streets surcharge to expire after seven years. And he insisted on cutting some especially insane and onerous taxes – most especially the commercial rent tax, under whose provisions a business is compelled to pay the government for the privilege of leasing space.

That tax has been eliminated everywhere but in Manhattan south of 96th street and is now only levied on giant companies. It’s still insane, and should be eliminated outright, but the fact remains: Of the four Democrats running for office, only Vallone seems to understand what harm high taxes can do.

Consider this horrific fact. “Between 1965 and 1994,” reports Raymond Keating in his “New York by the Numbers,” “New York City’s real per-capita total taxes leaped by 84.3 percent.” Look at that number again: 84.3 percent. Is it any wonder that the city’s manufacturing sector and its ability to create jobs both collapsed as the tax burden on its residents skyrocketed?

And yet local Democratic politicians have proved remarkably blind to this remarkably simple calculus. In a nation where 50 states compete with each other to provide the most comfortable home for businesses – so that their residents will be employed and their tax bases will be ample – New York’s local pols compete instead to be the first to promise to raise taxes. Fernando Ferrer and Alan Hevesi have proudly vowed to do so to raise the salaries of teachers and cops.

It’s a strange promise to be making only a few years into the city’s renewed financial health. They have forgotten the threat posed to the city’s future during the dark days when the entire banking sector came close to abandoning New York outright in favor of the more tax-friendly Research Triangle in North Carolina – which would have been the moment at which New York ceased being the world’s financial capital.

And it’s even more bizarre considering the fact that we are living right now at a time of profound economic uncertainty. Even Washington Democrats took a look earlier this year at the worsening situation and advocated a one-time tax cut to pour some liquidity into the economy.

Not to mention that New Yorkers are still, by any rational definition, overtaxed. We have the highest city tax rate in the country. We pay the most in sales taxes. We have the second-highest property-tax rate in the nation, after Boston.

Unfortunately, it is too much to hope, given the dominance in city politics of the public-sector unions whose members make a living directly from tax revenues, for there to be an actual across-the-board tax-cutter either in this race or occupying City Hall. The best we can hope for is a politician who really doesn’t want to raise taxes, doesn’t believe in raising taxes and knows the difference between a useful tax (Safe Cities, Safe Streets) and a bad one (commercial-rent tax).